The Square Package Group is thinking of buying, at a cost of $220,000, some new packaging equipment that is expected to save $50,000 in costs per year. Its estimated useful life is 10 years and it will have zero disposal value. The required rate of return is 16%. Ignore income tax issues.
REQUIRED:
Compute the following:
a)Net present value
b)Payback period

Question

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The Answer of The Square Package Group is thinking of buying, at a cost of $220,000, some new packaging equipment that is expected to save $50,000 in costs per year. Its estimated useful life is 10 years and it will have zero disposal value. The required rate of return is 16%. Ignore income tax issues.
REQUIRED:
Compute the following:
a)Net present value
b)Payback period

The Square Package Group Is Thinking of Buying, at a Cost